I had an invigorating and engaging day on Thursday at the Green Innovation in Business Network’s Boston Solutions Lab event. The event brought together about 100 people for a day of discussion and exploration through a largely un-conference format that favored peer interaction over droning speakers and PowerPoint slides. I made some great connections and learned a lot.
I served as a facilitator of a discussion about the root causes of resistance to sustainability. This post is a humble attempt to capture a day’s worth of conversation with some really smart, innovative people. There were three rotating brainstorming sessions followed by an extended design session. We were fortunate to have Peter Senge, one of the few formal speakers, join our small group for both brainstorming and design.
The Root Causes group began writing possibilities on a large piece of paper and then connecting the concepts. The result was a great idea map that guided the later work to design a solution. The brainstorming honed the the various ideas down to three major concepts:
- The retention of outmoded and inaccurate mental models such as the assumption, now several hundred years old, that natural resources are inexhaustible and should be free or extremely inexpensive. We have ample evidence to counter this but this assumption still underpins many people’s thinking and organizations’ strategy. Full lifecycle cost accounting, by contrast, is still in the infancy of its adoption;
- Social pressures and cultural norms around needs vs. wants, the desire for comfort, and the obsession with “more” that are the hallmark of our consumption-focued society;
- The challenge of balancing long- and short-term thinking to take into account far horizon impacts as well as near horizon returns demanded by the capital markets.
These, in turn, led us to a central cause and a possible solution: redefining growth.
The current empahsis on growth as principally a financial measure has come to prominence only over the past 40-50 years. It has been propigated by business schools with their focus on the internal rate of return on invested capital as the most critical metric to which managers must attend. In short, the mantra that the job of business is to make money. Senge pointed us back to Peter Drucker who said that profits are to business what oxygen is to human beings: profit is necessary for a business to survive but it must have a meaningful purpose just as we must breathe to survive but breathing is not our purpose. The purpose of a business is to meet some societal need through a product or service which it endeavors to deliver profitably. We seem to have lost the “meet a societal need” part along the way.
It was also noted that the mania for financial growth has largely subsumed the other types of growth that also have value: spiritual, intellectual, physical/health, and experience.
These sessions were meant to propose solutions as well as identify challenges and so the group that gathered for the afternoon design portion of the day undertook the daunting task of proposing a process through which growth could be redefined.
The outcome was an idea for an alternative capital market. The market would try to marry value and values by incorporating such features as term limits on capital (e.g. a share bought today cannot be sold for 30 days — building in some “strategic inefficiency” and discourage trading for trading’s sake) and reporting of the growth of positive social benefits (emphasizing doing good rather than just “less bad”). Companies choosing to list on this market would agree to greater transparency, accountability, and commitment to sustainability in return for more “patient” capital. The capital would be more patient because the enhanced standards to which companies would be held should lessen risk and volatility. The market would be open to, and would in fact encourage, alternative values-driven corporate legal forms such as B Corps and L3Cs which are being tried in Vermont.
Who would invest in this market? It was felt that this would need to be a mass movement. The slow money movement, for example, has an enthusiastic but small following. We felt that there is a large swath of the investing public that is unhappy with Wall Street and the alternatives it offers. Retirement investors, people with a built-in long horizon for their investments, would be a natural place to start. We would ask for pledges to get around the chicken-and-egg problem of not being able to start a market without money and not being able to attract money without a market.
Finally, it was agreed that this movement needed to borrow some tactics from the Tea Party: not being afraid to start small and build from the botttom up. We want to engage moms and their kids — people with a vested interest in a healthier, more responsible future. We need to construct a simple, compelling narrative that will bring more and more people into a discussion about redefining growth.
The next steps? Commenting on and forwarding the link to this blog post is one thing that you can do. Beyond that, we need to convene a group to move the discussion forward. Manyof the ideas around more responsible corporate governance already exist. What is needed is to begin to put our money where our mouths are. That will be hard…but fun.
What do you think? Would a market like the one described above be attractive to you?